SOLUTION: What is the difference between investing $4,000 for two years at 7% compound interest computed semi-annually or invest them at 5% computed compound interest quarterly basis?

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Question 1163100: What is the difference between investing $4,000 for two years at 7% compound interest computed semi-annually or invest them at 5% computed compound interest quarterly basis?
Found 2 solutions by ikleyn, Edwin McCravy:
Answer by ikleyn(52814)   (Show Source): You can put this solution on YOUR website!
.
What is the difference between investing $4,000 for two years at 7% compound interest computed semi-annually
or invest them at 5% computed compound interest quarterly basis?
~~~~~~~~~~~~~~~


The difference is


     = 172.15  dollars.   ANSWER

The formulas are self-explanatory.

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On compounded interest problems,  see the lesson
    - Compounded interest percentage problems
in this site.


Answer by Edwin McCravy(20060)   (Show Source): You can put this solution on YOUR website!
What is the difference between investing $4,000 for two years at 7% compound
interest computed semi-annually or invest them at 5% computed compound
interest quarterly basis?
They always say, "Go by the higher interest rate, not the frequency of
compounding". Let's see if "they" are right:







Looks like "they" are.

Edwin

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